PRESS RELEASE: Nigeria's Economy On The Brink Of Collapse, ACN warns

CBN Governor Sanusi Lamido Sanusi, IMF's Christine Lagarde and Nigeria's Finance Minister Ngozi Okonjo-Iweala
By Alhaji Lai Mohammed

The Action Congress of Nigeria (ACN) has alerted the nation to an impending collapse of the Nigerian economy, unless the Federal Government cuts the astronomical cost of running a bloated government and takes urgent measures to diversify the economy and shore up the production of oil, which remains the mainstay of the country's economy.

In a statement issued in Lagos on Sunday by its National Publicity Secretary, Alhaji Lai Mohammed, the party warned that if the listed measures were not taken, the government may not be able to pay its bills, including workers' salaries, within the next few years.

''Contrary to what the FG may say, this warning is not about crying wolf but is actually borne out of a patriotic fervour devoid of politicking, which is the usual refrain of this government when alerted to its shortcomings,'' it said. ''We will like to be proven wrong, but this will depend on uncommon and monumental effort, rather than on the basis of the usual canned response from the government.''

ACN said the red alert was based on four empirical evidence: The cost of oil production which has skyrocketed from 4 dollars per barrel in 2002 to 35 dollars presently; the massive corruption in the oil sector, with oil theft and sabotage leading to lost production and costing Nigeria some 6 billion dollars annually in crude theft; the sharp fall in the discovery of new oil and gas reserves due to the low investment in the sector, and the most serious of all, the
challenge posed by alternative sources of global supply of oil and gas.

The party said the cost of oil production rose from only 4 dollars per barrel in 2002 to 7 dollars per barrel in 2005 and, from the 12 dollars per barrel at the onset of the Yar'Adua/Jonathan Administration in 2012 to 35 dollars per barrel in 2012, according to the just-concluded Nigeria Oil and Gas Conference in Abuja, where the mind-boggling cost hike was attributed to the cost of security in the Niger Delta (put at 16 dollars per barrel), it said.

''In other words, the gains recorded from ending militancy in the Niger Delta due to the Amnesty Programme have been wiped off by the cost of maintaining the 'peace'. Here is how Shell Nigeria MD Mutiu Sunmonu described the situation: 'Operating in the Nigerian oil and gas environment can be long and tortuous with costs at the high end of the global scale. There are a multitude of security related issues that have to be dealt with on a daily basis.

'''In the recent past, militancy has simply been replaced by INDUSTRIAL SCALE oil theft and sabotage(emphasis ours). We, and others, have had to shut-in significant production; spend huge amounts on replacing and repairing hardware and deploying massive resources to clean up spills'.”

On the discovery of new oil and gas reserves, ACN said the disastrously-low level of exploration activity in Nigeria is supported by the statistics released by the US Department of Energy for deepwater discoveries from 2009 to 2011 in which Brazil alone contributed some 40 new discoveries or 20 percent of the global total, US and Australia contributed 10% each, countries like Ghana making nine new discoveries or 5% of the global total, while Nigeria had only 4 discoveries or 2% of the global total during this period.

This paltry discovery of new oil and gas reserves is due to the low investment in the sector, which needs to attract 15 billion dollars annually in capital investment, up from the present 3 billion dollars, in order to remain a significant global oil supplier and a respected player in OPEC, the party said.

It said, however, that all those challenges pale into little significance when placed against the challenge posed by alternative sources of global supply of oil and gas seriously - that is Shale oil and Shale gas!

''Here are the facts: The US has more than doubled its estimates of recoverable domestic Shale-gas resources to some 827 trillion cu. ft. (23 trillion cum), more than 34 times the amount of gas the US uses in a year.

Together with supplies from conventional gas sources, the US may now have enough gas to last a century at current consumption rates.

''Last month, the agency released a similar announcement in respect of Shale oil to the effect that California's valleys alone hold as much as 15.4 billion barrels of Shale oil, which companies were hitherto unable to reach because the oil exists in pockets of rock that were expensive to reach before the present advancements in fracking technology. Similar announcements are being made in Europe and parts of Asia.

''For the first time in nearly a decade, the US has regained the position of being the world's largest producer of natural gas and soon also oil. Thus, in less than five years, the US has gone from seeking new sources of oil and gas overseas to being self-sufficient. Industry experts believe that Shale oil and Shale gas will revolutionize the industry—and change the world—in the coming decades. It will prevent the rise of any new cartels and alter oil
geopolitics.

''The announced objective of the US Government is to drive down oil prices from the current 100 dollars per barrel to 50 dollars per barrel within 2 years. If this happens, which is very likely in view of the alternative sources, Nigeria, with a cost of production of 35 dollars per barrel, would immediately go out of business, with dire consequences for an economy that thrives largely (if not solely) on oil,'' the party said.

It said the signs of imminent trouble are already visible for those who are willing to see: The Brass LNG Project is unable to take Final Investment Decision (FID) because of the collapse in the US LNG market and rising costs; and a similar situation faces the Olokola LNG Project.

ACN therefore called on the Federal Government to put on its thinking cap in order to rise to the challenges listed above and save Nigeria's economy from collapse, adding that any delay could mean that those in charge of the country's affairs would not have enough time to change
course as the ship of state heads for the rocks.

Alhaji Lai Mohammed
National Publicity Secretary
Action Congress of Nigeria (ACN)
Lagos, Feb. 24th 2013

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@Deri

deri stop howling like a deranged dog..................there u go again barking up the wrong tree..................[from the write up] "ACN therefore called on the Federal Government to put on its thinking cap in order to rise to the challenges listed above and save Nigeria's economy from collapse, adding that any delay could mean that those in charge of the country's affairs would not have enough time to change
course as the ship of state heads for the rocks.".....why then do you start with tribal sentiments................................damn you are one loose rabied.....................

ACN is being alarmist 1

The Nigerian economy has achieved its most consistent growth in its history by growing by over 7% per year from 1999 to date. Nigeria has also been diversifying its economy in such a manner that its non oil exports have become a higher percentage of its foreign exchange earnings.

Nigeria is doing well. India and china achieved similar growth over a 15 year period before its citizens woke up to the reality of its change in place in the world.

Alternative energy sources are far from viable at the present time. America is still concerned to control the middle east and Nigeria precisely because of energy. The US itself is sitting on massive reserves of energy at the present time. Nigeria's major concern comes from America no longer needing to import Nigerian fuel because it is exploiting the vast oil wealth from its own land.

Nigeria's main problem is its increasing debt profile and its endemic corruption (which is now part of Nigeria's culture).

This might be a blessing...

I am kinda happy at this information. There is no gainsaying the truth in what Lai Mohammed has said. It is clear and verifiable, except one does not wish to do any mental exercises.

This might be the trigger Nigeria is waiting for to do the right thing. Corruption and kleptocracy are alive and well in Nigeria's corridors of power, and nobody seems willing to tackle this great monster except some few half-hearted attempts by mostly human rights activists.

This country NEEDS as a matter of urgency to dislodege these wicked men and women in the corridors of power and make an example of them. Two, we MUST take a look at this country (NOT nation) and deal with severe structural imbalances in its make-up, and I am not talking about papering over cracks...

This is the only way to break away and make a brand new beginning.

D igbos wil drink their oil .you peeps can only survive on crime

Only a fool will continue to depend on one thing alone for survival! It is just intellectual laziness, lack of political will that have made successive govts never to find alternative sources of Nigeria's economic mainstay

Just laughing

This man just realized the state of our economy which collapsed long before I was born. The worst thing to happen to anyone is to be a Nigerian. Outside our shores, the name Nigeria is not only a big joke but a laughing stock.

It's too late to effect any meaningful action by our rulers

It's too late to effect any meaningful action by our rulers without a radical structural change of our federal structure and political system. If we honestly predict the trajectory of our total security breakdown and the unforgiven level of youth unemployment at 35% we would need to suspend the national assembly and convene a national conference to discuss adopting a Canadian-type of federalism based on the six-geopolitical zones...called The UNITED FEDERATION OF AFRICAN REPUBLICS "UFAR"...then we'd invite ECOWAS countries to join, and eventually other African nations!

9ja has been running a rental economy 4 decades-prophet of doom

When you stole our 55 trillion from our oil revenue from 1958 till date, it had nothing to do with ethno-religious sentiments abi? When oil blocks were allocated to your fathers from the Fulani North, South West and East, while we drunk from our oil polluted waters-in d SS, it had nothing to do with my tribal marks--my root only became important to goats like you-when Jonah was elected presido of 9ja-tell us the number of ppl from the SS who own oil blocks? Or d names of individual involved in the oil scam from d SS--what is Lai talking about with AC which atiku dashed tinubu who changed it to ACN-? With no sound ideological ideas-how can u move a nation as big as 9ja forward!? When Awo told us shagari was running the economy aground-he was shouted down-by d fulanis-but when we call APC dooms day prophets,we are tagged drunken sailor fisher men-by buhari, tinubu and bakare--animals

The 4th reason is the most

The 4th reason is the most urgent if you look at global trends. Obama during his first term instructed US energy sector to find alternative sources of oil/gas supplies given ex-President Bush's adventures that distabilized the Middle East. Alaska was tapped. Canada now looks towards European buyers, flooding the market! Prices will hit rock bottom very soon and Deri can drink his oyel make we rest. The cost of running government is amorally bloated. We need to start the savings now, Greece and Spain will be child's play when they finally admit Naija is broke. Most importantly, diversification! Agriculture is the logical alternative for the short run, but, we must exploit other quick fixes like cutting Jumbo Pay!

@ Deri :
Lai Mohammed talked about last ten years not just the years of Dumbo. Nigeria is living on borrowed funds. Technically, Naija is broke. Under Dumbo, we've borrowed more than OBJ did in 8years! That's the point.

FUTURE OF NIGERIA WITHOUT OIL

My earnest prayer is that let all that ACN has predicted come to pass without the federal government find any solution.

It will be the greatest thing to happen to Nigeria because we will wake up from our slumber. Our arrogance will end. May it happen very fast while Babagida Aliyu is still in office. Let us see whether he will revive agriculture.

THE DISUNITED STATES OF NIGERIA

Nigeria is not a united country; different sections of the country want different things. One part shamelessly depends on the rest for survival (North), another part is hopelessly divided (East) and the other part is ridiculously timid and seemed missing in action (South). All these put together make any major economic and political reforms a tall order.

NIGERIA A FAILED STATE UNDER PRESIDENT GOODLUCK

NIGERIAN AS A STATE HAS FAILED SINCE IT CANNOT PROVIDE SECURITY FOR ITS CITIZEN WITHOUT THE HELP OF OUR COLONIAL MASTERS.THE BRITISH WAR PLANES HAVE UNDERMINE OUR SOVEREIGNITY AS A STATE UNDER LEADERSHIP OF THE WEAKEST PRESIDENT IN OUR HISTORY OF LEADERS OF THIS OUR GREAT COUNTRY,I THINK THE NATIONAL ASSEMBLY SHOULD IMPEACHED MR PRESIDENT FOR THE SAKE OF OUR GREAT COUNTRY AND STATE

NIGERIA A FAILED STATE UNDER PRESIDENT GOODLUCK

NIGERIAN AS A STATE HAS FAILED SINCE IT CANNOT PROVIDE SECURITY FOR ITS CITIZEN WITHOUT THE HELP OF OUR COLONIAL MASTERS.THE BRITISH WAR PLANES HAVE UNDERMINE OUR SOVEREIGNITY AS A STATE UNDER LEADERSHIP OF THE WEAKEST PRESIDENT IN OUR HISTORY OF LEADERS OF THIS OUR GREAT COUNTRY,I THINK THE NATIONAL ASSEMBLY SHOULD IMPEACHED MR PRESIDENT FOR THE SAKE OF OUR GREAT COUNTRY AND STATE

NIGERIA A FAILED STATE UNDER PRESIDENT GOODLUCK

NIGERIAN AS A STATE HAS FAILED SINCE IT CANNOT PROVIDE SECURITY FOR ITS CITIZEN WITHOUT THE HELP OF OUR COLONIAL MASTERS.THE BRITISH WAR PLANES HAVE UNDERMINE OUR SOVEREIGNITY AS A STATE UNDER LEADERSHIP OF THE WEAKEST PRESIDENT IN OUR HISTORY OF LEADERS OF THIS OUR GREAT COUNTRY,I THINK THE NATIONAL ASSEMBLY SHOULD IMPEACHED MR PRESIDENT FOR THE SAKE OF OUR GREAT COUNTRY AND STATE

A Perfect Reply For A Scoundrel Called DERI

RE:DERI : THE RE-EMERGENCE OF ETHNIC SAVAGES! A Perfect Reply For A Scoundrel From the Creek:

"Deri,should read "Heart of Darkness" by Joseph Conrad to understand the meaning of savage. If your mentality is weak to differentiate between good and bad certainly you're worse than a savage. Being a ruler through money inducements,ethno-religious favoritism,party cults arrangements and systematic rigging does not make a corrupt,inept,ethno-religious bigot,liar and rascal to be the same as good people like Awo, Buhari, or Lai who are not thieves and incorruptible. You will hang yourself if by 2015 we oust your ethnic lord from Aso to the wilderness of creeks. Nigerians now have understood the people they can trust to be their leaders but not liars and rascals" - Sanisi A. Yaradua

Thanks a lot Sanusi A. Yaradua.

The ACN Scenario is a certainty

In a country where you have able and honest people in Government, the plan and solutions to the eventuality of this ACN scenario would have been ready by now. That is the full infrastructure for the means of production such as electricity, landline telephone, strong institutions, etc. would have been in place by now for the productivity of the huge human capital of the country that can replace the lost oil revenue.

But the PDP people have been and are using every open measure not even trick to stealing and sharing the available crude oil and gas revenue.

From 2015 of the progressive APC Federal Government, we shall see which of the advanced countries the PDP rogues will relocate with their stolen Nigeria wealth. The US will not grant them asylum to invest their stolen money in its country. I do not know about the UK and other countries whether they will welcome the PDP thefts with their stolen money.

A warning that is in the present!

What Lai Mohammed said is a warning that has always been there! Previous govts had always relied on petroleum ONLY as Nigeria's economic mainstay. Whenever each govt made a budget it always relied on the unreliable price of crude oil per barrel! That has, and shall, always be preposterous! So what Mohammed is doing or saying now was only repeating the obvious he had itemized in his warning! Only a fool will continue to depend on one thing alone for survival! It is just intellectual laziness, lack of political will that have made successive govts never to find alternative sources of Nigeria's economic mainstay. And coupled with the ease with which leaders could steal oil money and bunker the oil, nobody cared to do anything serious. Maybe if the economy failed corruption might abate or stop; another silver lining round the black national cloud!

for the records.

This comment must have being refering to some lunatic comment by a psychophant, not Lai Mohammed.

Looks like someone read my FB post.

Very soon, the people in SS will have to drink their oyel. LOL... U.S will not allow any cartel to hold them by the neck anymore.

Lai Mohameed never mind the

Lai Mohameed never mind the drunking fisher men, they dont have enough education to understand the implication of your explanation and those that attended school among drunking fisher men had inferior education like their incompetent brother President Gej, so never blaim them for their responses, Lai mohameed is not directing the write up to drunking fishermen like you people because we understand level of your education and exposures.

It is unfortunate that the

It is unfortunate that the states including Lagos are in the same boat as the federal government, in profligate spending on white elephant projects that allow for siphoning of public funds into private accounts. Diversification of the economy cannot be accomplished through crony capitalism of governments picking and choosing friends and family members to take advantage of government programs as done in Nigeria. Crushing taxation of companies as practiced in Lagos is not the solution either.
To diversify, governments need to provide enabling environment and be transparent in all transactions. Government needs to be inward looking in procurement and finding solutions to local problems.

RE:DERI : THE RE-EMERGENCE OF ETHNIC SAVAGES!

Deri,should read "Heart of Darkness" by Joseph Conrad to understand the meaning of savage. If your mentality is weak to differentiate between good and bad certainly you're worse than a savage. Being a ruler through money inducements,ethno-religious favoritism,party cults arrangements and systematic rigging does not make a corrupt,inept,ethno-religious bigot,liar and rascal to be the same as good people like Awo, Buhari, or Lai who are not thieves and incorruptible. You will hang yourself if by 2015 we oust your ethnic lord from Aso to the wilderness of creeks. Nigerians now have understood the people they can trust to be their leaders but not liars and rascals.

What an idiot.

It only shows how ignorant and poorly educated you are, is so obvious you are unenlightened and have absolutely no access to credible information just like your hopeless and visionless leaders.Such a shame that in the 21st century with all the challenges of climatic changes with the rising cost of exploration coupled with the issue insecurity in oil producing nations people like yourself cannot see beyond their nostrils that the world has to seek alternative sources of energy to save mankind.

History

Only a good student of history would be able to give a sane and proffer solution to the issue and not calling for splitting. the best way to handle the situation is to look inward and have a workable frame work that would better serve the need of the people and not the one aimed at enriching pockets of some group(s). failure to get it right may give birth unforeseen eventualities.

NIGERIA-DIVERSIFY YOUR ECONOMY, REDUCE DAVID MARK/TAMBUWAL PAY.

The inability to reduce the cost of governance and the lack of political will to redirect the Nigerian economy away from oil and gas constitutes criminal negligence and spells a doomed future.
Despite the status of our economy David Mark and Tambuwal lead the way in the obscene pay haul of the plundering legislators,they earn several times the salary of Barrack Obama,President of the world's richest nation.
Irrelevant political appointments and Board memberships which serve as mere conduits to siphon funds illegally from the dying economy have continued relentlessly in the PDP corrupt system as all are fixated on quick oil and gas proceeds.
There is little or no effort to drive the economy in other directions because the money comes easy from oil but trend clearly shows that the days of easy petro-dollars are numbered.

Lie is at it again. He has

Lie is at it again. He has ran out of idea on how to deceive the populace again. Since the truth abt development is bcoming obvious, he needed come up with this. Lie mohamed and his frustrated Party, ACN can't deceive Nigerians anymore. the issues he has raised here only exists in his personal imagination. He is crying wolf where there is none.

NIGERIA-DIVERSIFY YOUR ECONOMY, REDUCE DAVID MARK/TAMBUWAL PAY.

The inability to reduce the cost of governance and the lack of political will to redirect the Nigerian economy away from oil and gas constitutes criminal negligence and spells a doomed future.
Despite the status of our economy David Mark and Tambuwal lead the way in the obscene pay haul of the plundering legislators,they earn several times the salary of Barrack Obama,President of the world's richest nation.
Irrelevant political appointments and Board memberships which serve as mere conduits to siphon funds illegally from the dying economy have continued relentlessly in the PDP corrupt system as all are fixated on quick oil and gas proceeds.
There is little or no effort to drive the economy in other directions because the money comes easy from oil but trend clearly shows that the days of easy petro-dollars are numbered.

D Nigerian economy DEPENDS on

D Nigerian economy DEPENDS on the sale of crude oil from the South south-period! The 36 states of the federation also relies on the SS for survival-Pls get that into your head--that is why the fulanis, ibos and yorubas do not want the south south to go--sadly when Awo raised similar alarm during the era of shagari-the Lai Mohameds called Awo a prophet of doom then! That was what led thief buhari to sack shagari after the senate started investigating Buhari-Lai the alarmist is just out there calling on d army to take-over d government of Gej! The USA is still grappling with how to fix here economy--it was the fulani North that instigated d boko haram attacks on 9ja with a view to making our economy collapse --d only way out is for us to split

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